Australian Expats Returning Home: Financial Tips



Of the average of 300,000 Australians leaving our shores to start a new life abroad, only an estimated 80,000 see that dream realised. Moving overseas promises a new and exciting lifestyle. However, it’s more than just a holiday. To live abroad successfully, you need to plan financially for the long term.

Managing finances while living overseas can be challenging. From negotiating local banks (often in a foreign language) to understanding tax laws, expats in a foreign country should understand their financial obligations before moving. Organising your finances to return to Oz is just as confusing.

Follow our financial tips for expats to make the most of your expat life and plan for your return to Australia.

What Financial Challenges Will You Face as an Expatriate?

Moving abroad might significantly affect your finances. You should be mindful of new tax rules, exchange rates, currency risk, and living expenses. Australian expatriates face many challenges. However, understanding what you’re up against will help your financial planning.

Living Expenses

Whether the cost of living goes up or down in your new country, you need to manage your cash well to ensure you don’t go beyond your means when you return. Negotiating flights and shipping costs and travel insurance, health insurance, and accommodation can quickly add up.

To put your financial planning into perspective, the cost of living in Singapore for a single person is about AU $1,311.45 per month without rent or mortgage payments. The cost of living in Hong Kong is AU $1,448.94 per month.

However, the average person in Australia spends AU $1,335.99 per month. The difference of $100 or even $20 a month could have drastic financial implications. Consider how you will manage the difference. Where will you source the additional funds needed? How will you manage the surplus cash?

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

Cross-Border Dependents

If you moved abroad to work, you might not have moved with your family. Having cross-border dependents might have financial benefits and drawbacks. If you have a family member in your host country while you return to Australia, consider how you might manage a different currency in your budget.

For example, say you lived in Singapore and need to pay for your children’s education while returning to Australia. Consider how you might send the funds from your native country in the most tax-efficient way. How will exchange rates affect you?

Tax Implications

One of the most vital things you should do before moving back to Australia is to seek professional advice. Speak to financial planning services or tax advisory services to understand your tax obligations.

A common mistake many expats make is not knowing where they pay tax. Firstly, you need to see if you’re an Australian tax resident. If yes, you will need to pay tax on your worldwide income and foreign retirement account distributions. If not, you only have to pay tax in Australia for Australian sourced income.

Fortunately, most expats can cease their tax residency. However, if you remain a tax resident, you might face double taxation in your new country and Australia. Seek tax advice about your obligations and residency status.

When you return to Australia, your tax residency will begin again from the day you land. Make sure you cut ties with your host country, so you don’t have to pay tax on your worldwide income upon return to Oz.

Asset Rules

Unfortunately, you cannot always keep your Australian financial accounts, retirement savings, or assets when you move abroad. Similarly, you may have to give up foreign assets, investments, and bank accounts when you return to Australia. Ensure you check with your credit providers and financial authorities to understand what you’re entitled to before leaving.

Additionally, if you own a property in your host country and wish to sell, do it before moving back to Australia to ensure the capital gains aren’t subject to Australian tax laws.

Moreover, if you wish to sell an Australian property upon your return, put off doing it immediately. Your Australian property was no longer your primary residence when you moved abroad.

Australian citizens have the main residence capital gains tax exemption. If you live in your property for a minimum of 12 months, you don’t have to pay CGT when you sell your home. Therefore, if you own an investment property in Australia, consider making it your permanent residence before selling.

Although, you may wish to keep your property as part of an investment portfolio. Consider your investment strategy and financial planning of your assets before returning to Oz.

Financial Tips for Expatriates Returning to Australia

Currency Risk

Investments in other currencies propose an increased risk. Fluctuating exchange rates could diminish your returns. As a result, Australian banks only offer home loans in Australian dollars. If you choose to invest in property, you must prove your foreign income to the Australian lender.

We’ll discuss financial tips for expats further on. To make the most of your investment options as an expat abroad, speak to a financial advisor.

Establishing an Investment Plan

As an Aussie expat living abroad, you might find your bank account and personal finance looking healthier. By ceasing your tax residency in Australia, you can take advantage of lower tax rates on your foreign accounts. To make the most of your newfound wealth, you need a long term investment plan.

However, you wish to spend your savings in the future, whether for financial security or retirement planning, seek investment advice.

A popular investment option includes starting a passive foreign investment company. To earn passive income, investors purchase a property in a high-rental yield area. Australia’s property market offers excellent rental yield and capital growth.

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

4 Financial Tips for Expats Returning to Australia

So, as an expat returning to Australia, how should you manage your finances? Check out our top tips to help with financial planning while abroad.

1. Save Money Now

If you’re set to move back to Australia within the next few months or years, it’s best to start saving money now. While it’s certainly possible that you enjoy greater financial freedom in your new country, there’s a chance your finances could take a hit when you return to your home country.

It’s best to begin saving money sooner rather than later. Whether you pool your cash into a savings account or invest wisely in property, it’s up to you. Take into account your income, the current exchange rate, and your dependents to assess how much you should save.

2. Choose Your Bank Accounts

Before packing your bags and boarding a flight, research Australian banks.

Additionally, if you plan to purchase a house abroad, learn about Australia’s latest interest rates and mortgage fees. Some lenders have strict lending policies for Australian expats earning a foreign currency. It’s best to find out the restrictions before returning to Australia.

3. Set Long Term Goals

Beginning life in a new country of residence might lead to a substantial change in your income and living expenses. For example, expats moving for employment reasons might see a salary increase. Plus, as Australia has some of the highest tax rates globally, expats may benefit from a lower taxable income.

Hong Kong and Singapore tax rates are significantly lower than Australian tax rates. Moreover, countries like the UAE or Oman have no tax rates. If you moved for economic reasons, your finances might suffer upon returning to Australia. Therefore, you must set out your long term investment strategy and financial planning to avoid squandering your cash.

4. Seek Professional Advice

Considering the currency risk, foreign asset regulations, tax laws, and other financial decisions, it’s best to seek financial advice sooner rather than later. Speak to a financial advisor, accountant, or expat expert about your upcoming move.

If you wish to purchase an investment property in Australia to supplement your income, speak to a mortgage broker who specialises in expat finances.

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

How Can Expats Buy a House in Australia?

Even if you moved overseas, you’re still eligible to purchase property in Australia and qualify for a home. So, how do you buy a house in Australia as an expat?

  1. Speak to a mortgage broker: Firstly, you will need to establish your borrowing power. Many lenders are hesitant to lend to applicants earning a foreign currency. Therefore, you will need a mortgage broker to improve your chances of home loan approval.
  2. Consult a buyer’s agent: While living abroad, it’s hard to research the Australian property market, attend open houses, and find the best investment opportunity. A buyer’s agent will offer advice and do the groundwork on your behalf.
  3. Engage a conveyance: You will need a legal expert to manage the sales contract and ensure the home buying process meets the required laws. They will inform you if you need to pay the foreign buyer’s stamp duty surcharge (this is only if you purchase jointly with a foreign resident).
  4. Apply for your expat home loan: Your mortgage broker will help you put together an application and secure competitive rates on your expat mortgage.

With your investment property sorted, you will need to enlist property managers to look after the rental home while you’re away. If you’re looking to purchase a house to live in, your mortgage broker and buyer’s agent can help you prepare everything for your return to Australia.

Return to Australia With Financial Freedom

As an expat returning to Australia, you want to settle back into your home country smoothly. However, the move can disrupt your finances in unexpected ways. Odin Mortgage understands the unique financial needs of expats. Our experienced brokers create personalised mortgage solutions to give you financial freedom and flexibility when you return to Australia.

Don’t let your move limit your financial future. Contact Odin Mortgage today to discuss your expat mortgage needs.

Frequently Asked Questions

While living abroad, you may enjoy lower tax rates and greater financial freedom. While the cost of living in Singapore and Hong Kong is comparable to Australia, it’s best to save as much money as possible for the potential return home. Property investments provide passive rental income and long term capital gains.

Expats can invest in properties, just as any other Australian resident. Although, some lenders might hesitate to consider your total income if you earn in a foreign currency. As a result, you might find your borrowing power reduced. Speak to an expert mortgage broker about suitable lenders for your situation.

While living abroad, you should set yourself long term financial goals. Whether you want to save money for retirement planning or purchase an investment property, setting yourself a plan is the best way to stay on top of your finances while abroad.

Expats living overseas should contact specialist mortgage brokers to organise an expat home loan application. A broker can help you put together a robust application that will showcase your foreign earnings and result in competitive mortgage rates.

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10 Best Tips for Australian Expats to Maximise Borrowing Power & Approval Success